Strongest Rare Coin Bull Market Advisory In More Than A Decade

Since 1995, Mike Fuljenz of Universal Coin & Bullion has served as a valued precious metals and rare coin advisor to Taipan readers. In early November, we received a call from Mike and we discussed at length the arrival of the fourth rare coin bull market in the last 35 years. The past three rare coin bull markets have seen stellar price increases of 348%, 665%, and a spectacular 1,195%.

After listening to Mike’s views, we decided to include an article he published recently in his award-winning newsletter, Investor’s Profit Advisory, detailing his analysis. From everything we can tell, Mike’s forecast appears to be dead on. And we encourage all Taipan readers to read it thoroughly.

For those of you who may not be familiar with Mike Fuljenz, allow us to share with you just some of the highlights of a career in precious metals and rare coins that spans more than thirty years.

For starters, Mike’s newsletter, Investor’s Profit Advisory, has recently received its fifth consecutive Numismatic Literary Guild (NLG) Newsletter Award for his ongoing and authoritative analysis of rare coins. This unprecedented streak of newsletter awards is testimony to the respect Mike’s analysis receives from his industry peersówriters, editors, publishers, and producers.

In addition, in each of the past two years, Mike has received the NLG Investment Book of the Year Award. In 2000, he won for his book Type III Double Eagles: 1877-1907, and recently he pulled down the 2001 award for his A Collector’s Guide to Indian Head Quarter Eagles. Both books served to ignite collector and investor demand in their respective niches, stimulating bull market conditions.

Mike’s most recent NLG award brings his total to an unprecedented eighteen over the past decade, once again underscoring his long-term service and ongoing contributions to his industry. In addition to book and newsletter awards, Mike has received numerous Reporter of the Year awards for his CNBC television and network radio appearances.

To further highlight Mike’s reputation for authoritative integrity: over the years, Mike has served as advisor and consultant to the United States Mint, the Federal Trade Commission and the U.S. Post Office on rare coin and consumer protection issues.

From 1982-1998, Mike taught week-long seminars on gold and silver coinage for the American Numismatic Association [ANA] in Colorado Springs. In 1996, the ANA lauded Mike’s long-time service to the rare coin industry by granting him the prestigious ANA Presidential Service Award.

Finally, Mike is a member in good standing of the exclusive Professional Numismatist’s Guild, the most highly regarded of all rare coin associations.

Mike is always willing to provide copies of his latest award-winning newsletter to Taipan subscribers absolutely free for the asking: just call toll free at (800) 459-2646. Or you can download it for free at Mike’s impressive website, www.universalcoin.com, which is jammed full with useful investment information and a free video offer.

All in all, Mike’s reputation as the rare coin expert’s expert is well deserved, and we at Taipan are proud to include him in our network of financial investment experts. We encourage all Taipan readers to review Mike’s article in this issue, and then to call Mike Fuljenz’s Universal Coin and Bullion toll free at (800) 459-2646 to discuss how you can position yourself for the coming rare coin bull market.

Major economic and political uncertainty tends to drive rare coin prices higher! In the last thirty years, there have been three complete rare coin bull markets: 1972-74, 1976-1980 and 1987-1989, and we are now in the early stages of the fourth. Each previous rare coin bull market cycle has been accompanied by a bear stock market, generally volatile oil prices and highly active interest rates. The current rare coin bull market is no exception.

Major economic and political uncertainty rises during extended periods of war, political scandal or terrorism. New presidential administrations, even second terms for popular presidents, also historically stimulate uncertainty.

Major economic and political uncertainty is reliably reflected by the following three economic indicators:

Bear stock market: Economic and political uncertainty triggers stock market stagnation and decline, the so-called bear market cycle. Once a bear market is confirmed, uncertainty spreads, and the number of buyers for precious metals products begins to dramatically increase. [see chart 2 ]

Highly active interest rates: In times of great uncertainty, interest rates are highly active. Federal Reserve rate changes are attempts to manipulate the underlying economic uncertainty. To control inflation, interest rates rise. To stimulate a failing economy, interest rates fall. In either direction, uncertainty prevails.

Volatile oil prices: In times of great uncertainty, oil prices are volatile, and tend to spike rapidly in response to political events. Since the Yom Kippur War and the first Arab oil embargo in 1973, war and terrorist events in the politically tumultuous Middle East have time and again proven a powder keg for oil prices, which historically spurs sudden price rises for precious metals. It is still true today, as oil prices spiked 20% and metals rose sharply immediately after the September 11 terrorist attacks. [see chart 2]

Increase in number of buyers for precious metals: a distant early signal

[see chart 1]

As uncertainty grows, the number of buyers purchasing precious metals products dramatically increases. Metals prices could also rise in response; however, this is not always the case. Central banks and institutes generally exert much more direct influence on metals prices than do individual purchases. Still, even when metals prices remain stable, the base number of individuals actively purchasing precious metals products can increase up to fourfold.

In turn, the influx of new buyers for precious metals products stimulates a similiar increase in the number of active rare coin buyers within 6-9 months. This increased demand triggers price increases over the following three years. Past rare coin bull markets have seen prices increase from 348% to as high as 1,195%.

The CU 3000 Index

Going back to 1970, the CU 3000 Index has tracked the monthly prices for all of the important, frequently traded United States rare coins. There are 3,000 individual prices tracked monthly, comprised of 732 different coins in up to nine different grades. The CU 3000 Index reveals that $1,000 of high-quality U.S. rare coins purchased in 1970, would today have an average current market value of approximately $54,500. [see chart 4, page 71]

The coming rare coin bull market

Highly active interest rates: In three of the last four bear markets in stocks, interest rates were highly active and changed frequently. In the nine months since President Bush took office, rates have dropped a record ten times, evidencing the severe underlying economic uncertainty, which was in place before September 11. In an effort to stimulate the failing economy, rates have been dropped to their lowest level since 1958. This is the clincher signal for the coming bull market in rare coins, as low interest rates tend to increase the number of buyers for precious metals and rare coins. Why? Because low interest rates remove incentive to keep money in low-yield CD’s and savings accounts.

Volatile oil prices: Since 1970, political tensions, especially in the Middle East, often trigger volatility in oil prices. In general, volatility in oil prices reflects major uncertainty, which drives increased numbers of buyers to precious metals. Immediately after the September 11 terrorist attacks, oil prices spiked over 20%, indicating their continued sensitivity to Middle East political tensions. With the War on Terrorism promising to be a long-term effort, oil prices will continue to be sensitive to sudden price spikes, and the prolonged uncertainty will continue to drive more buyers toward precious metals.

Bear stock market: In looking at the past thirty years of history, every major bull market in rare coins has coincided with a bear market in stocks. Now that the longest-running bull market in stocks is winding down and becoming a confirmed bear, the long overdue rare coin bull market is only 6-9 months away.

Increased number of buyers for precious metals: Every single rare coin bull market for the past thirty years has been presaged by an earlier dramatic increase in the number of buyers for precious metals products. Since the September 11 terrorist attacks, metals dealers have reported a strong increase in the number of individuals purchasing precious metals products. In 6-9 months, this increase in the number of buyers for precious metals, will stimulate a like increase in the number of active buyers for rare coins, driving prices higher.

Winds of uncertainty

These are most assuredly uncertain times, and uncertainty triggers a variety of economic events that set the stage for a rare coin bull market. War, political scandal and terrorism create the greatest uncertainty, which is then reflected in key economic indicators like highly active interest rates, volatile oil prices and a bear stock market.

The mere presence of economic or political uncertainty can stimulate an increase in the number of buyers for precious metals products. But the prospect of uncertainty over a prolonged period of time virtually ensures an increase in precious metals buyers, and that a rare coin bull market will subsequently appear. With the War on Terrorism a reality for the foreseeable future, interest rates at their lowest levels since 1958, ongoing volatility in sensitive oil prices, and a confirmed bear stock market already underway, uncertainty will prevail indefinitely.

The kicker here is the presence of the lowest interest rates since 1958. Increasingly we are hearing from customers who are moving money out of low-yielding CD’s and savings accounts and purchasing metals and rare coins instead.

There has already been a dramatic increase in the number of buyers for precious metals products, which will stimulate a like increase in the number of purchasers for rare coins 6-9 months from now. With all the other economic indicators appearing to be settling in for the long term, we expect rare coin prices to be on the rise for the next three years. With price appreciation rewards historically ranging from 348% to 1,195%, now is the time to act before prices rise further.

To find out how you can benefit from the coming rare coin bull market, call us today toll free at (800) 459-2646.